Government
of Alberta ■
For further information on this report and its contents contact:
Information and Analysis Branch
Health System Performance and Information Management Division
Alberta Health and Wellness
17th floor, 10025 Jasper Avenue
Edmonton, Alberta T5J 1S6
Rick Leischner, Senior Manager, Health Costing
(780) 427-0664
Rick.Leischner@gov.ab.ca
ISSN 1703-3055
ISSN 1920-5392 (Online)
December 2009
To obtain the electronic version of this report, please visit Alberta Health and Wellness’
Internet Site at: http://www.health.gov.ab.ca
Alberta Case Cost Report
For 2006/2007 Hospital A ctivity
Alberta Health and Wellness
December 2009
Table of Contents
Introduction
2-12
Definitions_
13
Schedule 1
Inpatient Cost Results
14-79
Schedule 2
Ambulatory Care Cost Results
80-99
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Alberta Case Cost Report
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Alberta Health and Wellness
December 2009
Introduction
The Alberta Costing Partnership has successfully developed patient specific case costs for both
inpatient and ambulatory care, for the tenth year. The partnership includes the costing Regional
Health Authorities (RHAs) along with Alberta Health and Wellness.
The 2006/2007 Case Cost Report discloses the cost of cases that were handled by the participating
health regions between April 1, 2006 and March 31, 2007. Cases are grouped by linking cost data
to activity data to provide appropriate summary information.
Although the data submitted has gone through reasonability validation, the Alberta Costing
Partnership provides no external assurance over the appropriateness and completeness of cost
allocations done by the RHAs.
The inpatient costs are grouped by Case Mix Groups (CMGs), and ambulatory care costs are grouped
by the Ambulatory Care Classification System (ACCS). Schedules 1 and 2 summarize cost data by
CMGs and ACCS cells, respectively.
Alberta’s Costing Partnership
The Information and Analysis Branch resides within Alberta Health and Wellness and is responsible
for carrying on the health costing mandate. Health costing was done in conjunction with the regional
health authorities (RHAs) using a common costing framework to generate patient specific case costs.
Representatives from the costing RHAs and Alberta Health and Wellness participate in the costing
round table review of the provincial cost results. The participants of this Costing Function Team
review the statistical analysis and cost comparisons. Issues identified in this process are
investigated and resolved prior to publication of this report.
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2006/2007 Costs
Volumes of Cost and Activity Data Collected
Inpatient
Ambulatory Care
Costed
Records
Provincial
Activity
Reported
Costed
Records
as%of
Activity
Costed
Records
(millions)
Provincial
Activity
Reported
(millions)
Costed
Records
as%of
Activity
2001/2002
185,000
337,500
55%
1.5
5.9
25%
2002/2003
194,000
345,000
56%
1.9
6.2
31%
2003/2004
195,000
353,000
55%
1.9
6.8
28%
2004/2005
196,000
357,000
55%
2.0
6.9
29%
2005/2006
206,000
365,000
56%
2.1
6.9
30%
2006/2007
216,000
364,000
59%
2.2
6.9
32%
Cost data were provided from 12 different sites. Each site tracks costs on a patient specific basis in
one or more functional centres.
The bulk of the costs for inpatient cases flow from inpatient nursing functional centres, therefore,
only sites with the ability to track nursing costs on a patient specific basis are included in this report.
Since inpatients routinely receive services in other functional centres such as operating and recovery
rooms, diagnostic imaging and laboratory services, regions have developed the capability to track
costs in these centres on a patient specific basis. Where this capability does not exist, regions use
allocation models to ensure that appropriate costs are properly distributed to inpatient cases.
The costs for ambulatory care cases are reported where there are systems to track costs on a
patient specific basis in the functional centres directly providing ambulatory care.
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The following table outlines the facility and availability of patient specific cost information submitted
in the 2006/2007 fiscal year.
2006/2007 Cost Data by Region/Facility
Regional
Health
Authority Site
Inpatient
E.R.
Day
Procedure
Clinics
2
Rehab
■■Hj. Alberta Children's
y , V J Hospital
Yes
Yes
Yes
No
Yes
No
Foothills Medical
Centre
. Yes
No
Yes
Yes
Yes
No
Rockyview
General Hospital
! Yes
No
Yes
Yes
Yes
No
• / Peter Lougheed
j Yes
No
No
No
Yes
No
■ - // : Glenrose
Rehabilitation
Hospital
Yes
No
Yes
Yes
Yes
Yes
Misericordia
Community
Hospital
Yes
Yes
Yes
Yes
Yes
Yes
Grey Nuns
Community
Hospital
Yes
Yes
Yes
Yes
Yes
Yes
/k Royal Alexandra
Hospital
Yes
Yes
Yes
Yes !
Yes
Yes
University of
Alberta Hospital
Yes
Yes
Yes
Yes
Yes
Yes
Led uc Community
Hospital
Yes
Yes
Yes
Yes
Yes
Yes
Sturgeon
Community
Hospital
Yes
Yes
Yes
Yes
Yes
Yes
Northeast
Community Health
| Centre
No
Yes
No
Yes
Yes
Yes
Capital Health currently provides the bulk of the ambulatory care cost data. Calgary Health Region
and Capital Health provide similar amounts of Inpatient data. The table below shows the percent
contribution from the respective regions:
2006/2007 Costed Cases
Region
Inpatient
Ambulatory
Capital
53% (113,822)
92% (2,021,471)
Calgary
47% (101,990)
8% (157,432)
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Data Flows
Cost data collected by the participating RHAs is forwarded to the Health Information and Anaysis
Branch (IAB) of Alberta Health and Wellness on an annual basis.
Processing of the raw cost data is done at Alberta Health and Wellness with the results reviewed and
validated in consultation with the Costing Function Team. The process ultimately results in the
development of patient specific case costs, average costs and relative values. The processed cost
records reside in the Alberta Health and Wellness database and are available for extraction for
research and management purposes subject to the provisions of the Health Information Act.
One of the primary users of the information is the Health Funding Unit at Alberta Health and
Wellness. For ambulatory care, the system wide relative values are used in the funding formula.
Funding calculations for Province Wide Services use the average costs from the inpatient data.
CIHI is also a significant user of the costing results. Alberta Health and Wellness sends the final set
of cost data to CIHI to be combined with cost data from Ontario and British Columbia to develop
national weights. One set of weights produced is the Resource Intensity Weights (RIWs) by Case Mix
Groups. The Health Funding Unit uses these RIWs in the funding formula for inpatient care.
The other major users of data are the regional health authorities. Finalized cost and activity data are
provided back to the regions in a summarized format. Regions use cost data for rate setting with
third party payers and providers, revenue analysis, financial planning, evaluation, and benchmarking.
In summary, various users have used the cost information to improve resource allocation and
consumption decisions.
Data Collection Processes
The costing exercise is heavily dependent upon data collection systems. There are two components
to the data utilized by Alberta Health and Wellness in developing case costs: activity data and patient
specific cost data.
Activity Data
Patient specific activity data is collected by all regions and represents unique information for each
particular service.
For example, the activity data includes:
♦ patient demographics (birth date, personal health number, gender, etc.)
♦ responsibility for payment
♦ procedure/diagnosis codes
♦ service dates
♦ service location
♦ patient disposition
♦ provider type
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“...[A]ambulatory care data includes data from traditional hospital-based programs (such as
Emergency and Day Surgery), as well as services delivered in community based settings (such as
outpatient clinics) [or private clinics], ... primary and secondary prevention as well as diagnosis,
patient education, treatment, and rehabilitative services.”1
Inpatient data include hospital discharge data from acute, chronic and rehabilitative facilities (which
includes psychiatric institutions and cancer facilities). As the facilities are reporting the activities in a
fiscal year, the activity records include cases from Alberta residents, as well as residents from other
provinces or from other countries.
All RHAs send both the ambulatory care and inpatient activity data directly to Alberta Health and
Wellness using the Morbidity and Ambulatory Care Abstracting Reporting (MACAR) system. The
ambulatory care data is grouped with the Alberta-developed Ambulatory Care Classification System
(ACCS) grouper. Inpatient activity data is collected and submitted to CIHI, where it is incorporated
into the Discharge Abstract Database (DAD). CIHI groups the data into Case Mix Groups. This
grouping methodology is also known as the CMG Grouper.
Cost Data
The costing regions provide patient specific cost data for both ambulatory and inpatient services. A
concerted attempt has been made to parallel the two processes, in keeping with the overall costing
framework. Cost data from the regions are submitted directly to Alberta Health and Wellness. The
cost data does not include payments made to Alberta physicians or allied practitioners. For
information on these payments, please refer to the Alberta Health Care Insurance Plan Statistical
Supplement. The current online version is available at:
http://www.health.alberta.ca/newsroom/pub-annual-reports.html
Costing data is submitted only once a year and includes, for each case, common information that is
used to link the data.
In addition, the files contain the following information:
1. Patient specific supply costs
♦ patient specific drug costs
♦ patient specific supply costs
These are supply costs that can be directly assigned to specific patients
(e.g. operating room supplies, drugs dispensed on a prescription or unit dose basis).
2. Other patient specific cost data
♦ Functional centre direct costs:
Include all costs (salaries, medical, and surgical supplies) and other expenses in
the patient care functional centres (called absorbing cost centres) for services
provided directly to patients. Also, included in these costs are the direct
administrative costs associated with the administration of a patient care area, such
as salaries of patient care managers and medical staff administration.
Ambulatory Care in Alberta Using Ambulatory Care Classification System Data , Alberta Health and Wellness, August
2004, p. 1.
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♦ Functional centre indirect costs:
Include costs associated with the administration and support functional centres
(called transient cost centres). These indirect expenditures are allocated to patient
care functional centres. Examples of these types of costs are general
administration and support services such as finance, material management,
facilities management, registration, patient food services, and health records.
♦ Non-specific patient drug allocation:
Are costs for ward stock and other drugs that could not be directly assigned to
specific patients.
The submitted costs do not include expenditures not related to patient care. For instance,
amortization of building and leasehold improvements, contributed services, or full cost of ancillary
operations is excluded.
Cost Data Processes
Cost data files are initially summarized into one record that includes the total case cost. The second
step is to link these costed cases to the activity files to obtain grouper assignments (ACCS cells or CMG).
Once linked, the relative values and average costs by group are calculated.
Trimming Data
Trimming of cost data is a standard practice in the calculation of average case costs and relative
values for each cell or group. The trimming process results in the exclusion of those cases that are
atypical from these calculations. Because of the trending analysis issue with the ICD-10-CA/CCI
coding system, this year trimming of inpatient cases in Alberta was based on the length of stay (LOS)
from the past three years of Alberta inpatient discharges. A trim point is determined for each group.
Any case with a length of stay beyond the trim point is considered an outlier or an atypical case with
an associated higher cost. The rationale for trimming is that the retention of outliers in the relative
value and average cost calculations would lead to the potential over-valuation of services.
The formula used in calculating the inpatient trim point is applied to data from the Discharge
Abstract Database and is outlined below:
(LOS of third quartile) + (2 * (LOS of third quartile - LOS of first quartile))
Specific Processes for 2006/2007 Cost Computations
The cost computation processes used in this report are consistent with the prior year. For reporting
purposes, simple averages were used. However, 2005/2006 costing was adjusted by inflation to
assist users that want to compare multiple years of data. The inflation adjustment applies to
2005/2006 costs was 4.03 per cent.
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The data submitted was edited for reasonability. The following list describes the type of edit
checks used:
1. Ambulatory care
a) exclude any cases which did not include allocated overhead costs
b) exclude any cases grouped to ACCS 3 (nerve injections) with a case cost
less than $16.00
c) exclude any cases grouped to intervention cells (ACCS groups between 1.1 and 99),
excluding ACCS 3 (nerve injections), with a case cost less than $21.00
d) exclude any cases grouped to ACCS 1062, 1101, 1111, 1121, 1151, 1201, 1221,
1241, 2021, 2022, 2051, 2063, 2070, 2082, or 2099 with a case cost
less than $5.00
e) exclude any cases grouped to clinical cells not specified in l.d) with a case cost
less than $11.00
2. Inpatient
a) exclude any cases with a case cost of less than $200.00 if the length of stay is
greater than one day
b) exclude any cases without nursing costs
c) exclude any cases with a cost per day less than $100.00
d) exclude any cases which did not include allocated overhead costs
e) exclude any cases beyond the trim point
f) exclude any cases with an invalid length of stay
The rest of the costing process remained constant with prior years cost development.
Grouping of Data
Nationally, CIHI sponsors the use of the Case Mix Groups (CMG) grouper for inpatient cases. They
have developed Resource Intensity Weights (RIWs) for each CMG. The Health Funding and
Economics Unit began utilizing these RIWs in the 2001/2002 funding calculations.
The Alberta health system adopted a new inpatient grouper effective in the 2007/2008 fiscal year.
The new grouper, CMG+, is significantly different from the current CMG.
For grouping of ambulatory care data, the Alberta-developed Ambulatory Care Classification System
(ACCS) is used. CIHI also sponsors a national ambulatory care grouper, Comprehensive Ambulatory
Classification System (CACS), which is modeled upon Alberta’s ACCS. Plans are in place to switch to
CACS in 2010.
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CMG Grouper
The CMG grouper groups patients together who are similar in terms of resources used.
The variables required to define the Case Mix Groups are:
♦ most responsible diagnosis
♦ weight (for neonates)
♦ presence or absence of operating room procedures
♦ surgical hierarchy/medical hierarchy
♦ diagnosis types 1, 2, W, X, and Y2
The complexity overlay on the CMG codes enhances the prediction of utilization of acute care
resources within medical/surgical specialties. A complexity level is not applied to a CMG code
unless it improves homogeneity in length of stay (LOS) or total resource use.
The variables used in assigning the complexity levels are:
♦ major clinical categories/ case mix groups
♦ pre-admission comorbidity (type 1 diagnosis)
♦ post-admission comorbidity (type 2 diagnosis)
♦ service transfer diagnosis (type W, X, or Y diagnosis)
♦ comorbidity grades
♦ number of body systems involved
♦ number of “complex” comordities3
The complexity levels are as follows:
Plx 1 - no complexity
Plx 2 - complexity related to chronic conditions
Plx 3 - complexity related to serious/important conditions
Plx 4 - complexity related to potentially life-threatening conditions
Plx 9 - complexity not applied (for instance, the complexity may already be captured within the
CMG assignment methodology)4
A Plx group is the combination of CMG code + Plx Level. CIHI also applies an age overlay to each
Plx group based on the age of the patient:
1) 0 to 17 years old
2) 18 to 69 years old
3) 70 plus years old
There are 478 CMG codes and 1,588 Plx groups. When the age overlay is applied to these Plx
groups, the result is 4,760 new codes (commonly referred to as Aplx cells). Unfortunately, there are
low volume concerns for the majority of these Aplx cells using the Alberta costing data. Therefore, the
cost results by CMG code + Plx level + age group are not published in this report. The final set of
2006/2007 inpatient data were classified using the CIHI CMG Grouper. A relative value was
calculated for all CMG groups, except for CMG 997 Stillbirths since there is no activity reported for
this CMG.
2 Grouping Methodologies: CMG™ and Plx™, Canadian Institute for Health Information, Revised 2000, p. 9.
3 Ibid., p. 21.
4 Ibid., p. 24.
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ACCS Grouper
The Ambulatory Care Classification System (ACCS) was developed in Alberta. The project began in
1989 under the direction of Alberta Health and Wellness with the intent to create an ambulatory care
grouper tailored to Alberta specifications. The project began with a review of existing groupers (DPGs,
PACs, EDGs) and used these building blocks, in combination with Alberta data, to develop ACCS.
To run the ACCS grouper the required data consist of patient demographics and visit related
information such as diagnosis/procedure code, mode of service, date of service, patient disposition,
etc. The ACCS grouper used to classify the cost data this year was composed of 430 groups.
The authors and managers of ACCS have the ability to modify the grouper based on Alberta results,
or to meet specific needs within the province. For instance, a review of the resource homogeneity of
a number of ACCS grouper cells was undertaken in early 2000. In addition to an examination of the
relative resource homogeneity of each of the groups, a review was done of the need for a number of
under-populated or similar groups.
Grouping Results
Each of the schedules includes a list of the ACCS or CMG group numbers along with the descriptive
name of each group. For more information on the contents of each group (i.e. ICD-10-CA/CCI codes),
it will be necessary for interested parties to go to source documents for the respective groupers.
Information on the ACCS grouper can be obtained from the Health Authority Funding and Financial
Accountability Branch of Alberta Health and Wellness (780-427-0664).
Only a small number of ungroupable records were found in both the inpatient and ambulatory care
activity and cost submissions.
Data Top-Up
Top-up is the generally accepted practice of supplementing any low volume cells with cost data from
historical data or another jurisdiction. Determining the top-up threshold is a somewhat subjective
decision. In Alberta, the standard has been set at five, meaning that any cell with four or fewer cost
records will require topping-up with additional cost data.
In the past, low-volume cells were topped up with cost records from the remaining set of cost data
(data from 1997/1998 to 2002/2003). Topping up these low-volume cells results in a much more
extensive data set upon which to base average costs. Furthermore, this extensive data set also
reduces the requirement to rely upon other jurisdictions’ data for top-up. No attempt is made to
top-up any cells for which no cases had been reported within the province.
Contribution to National Weights
Data from Alberta, Ontario, and British Columbia are used by CIHI to develop Resource Intensity
Weights (RIWs). However, data from Alberta and Ontario are used to develop the Ambulatory Cost
Weights.
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Resource Intensity Weights
On an annual basis, the Canadian Institute for Health Information (CIHI) develops and publishes a
schedule of RIWs based on their CMG grouper. RIWs are also published for Day Procedure Groups (DPGs).
According to CIHI’s Web page5
“The Resource Intensity Weights (RIW) system is a relative resource allocation
methodology for estimating a hospital's inpatient specific costs for both acute and
day procedure care. RIW is used to standardize the expression of hospital case
volumes, recognizing that not all patients require the same health care resources.
Volume is then expressed as "weighted cases".
“Uses
• translating case mix data into cost data
• determining unit costs for atypical cases
• identifying priorities by CMG for utilization management
• planning new programs
• evaluating program efficiency”
Starting 2006, CIHI has not produced RIWs under the CMG Plex methodology. In subsequent
publications, RIW2007 will refer to the CMG Plus grouping methodology instead.
Comparing Data Utilized by CIHI in Developing RIWs
700.000
600.000
IX .... .
RIW2000
RIW2001
RIW 200 2
RIW2003 &
RIW2005
j
► RIW 2 004 _j
BC 1998/1990
I BC 2001/2002
BC 5022003“
5 Canadian Institute for Health Information. RiW™ and Expected Length of Stay Methodology [cited 15 May 2003].
Available from: <http://secure.cihi. ca/cihiweb/dispPage.jsp?cw_page=casemix_riw_ e>.
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Ambulatory Cost Weights
CIHI also develops Ambulatory Cost Weights (ACW) for the ambulatory care data grouped by CACS.
According to CIHI’s web page6
“ACW are made to be relative to the average cost of a specific group of patients. This is known
as a ‘fixed’ anchor point. The mean cost against which all others are compared is the mean
cost for CACS cell 75, “Hemodialysis”. The CACS cell for dialysis is chosen because it
represents a very specific patient population and makes up a large proportion of the cost
database (>100,000 records). This large sample size ensures a stable estimate of the true
cost of performing the service.”
“Uses
• translating CACS data into cost data
• determining costs for atypical cases
• identifying priorities by CACS group for utilization management
• planning new programs & evaluating program efficiency”
Conclusion
In its tenth year, the Alberta Costing Partnership has once again produced Alberta costs for both
inpatient and ambulatory care. The significance of this achievement can be demonstrated by the
widening interest, which continues to be expressed by other health organizations and researchers.
In particular, the contribution and acceptance of Alberta cost data in the development of national
Resource Intensity Weights through CIHI attest to the quality of the work that has been done in the
province. As well, Alberta continues to lead the rest of the country in comprehensively collecting and
costing ambulatory care data.
The continued success of the Alberta Costing Partnership could not have occurred without the
dedication and commitment of RHA and Alberta Health and Wellness staff. The cost results included
in this report are the product of many hours of effort, an achievement of which all participants can
be proud.
The Information and Analysis Branch would like to thank all those individuals who have contributed
to this work.
6 Canadian Institute for Health Information. Ambulatory Cost Weights [cited 8 July 2005]. Available from:
<http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page = casemix_acw_ e.
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Definitions
Activity Volume
Total number of hospital and clinic cases reported to the MACAR system.
The MACAR system collects all inpatient and outpatient cases in Alberta.
Average Cost
Mean of the costed cases.
Avg LOS Costed
Cases
Average length of stay in days; the day of admission is counted but the
day of separation is not counted in this calculation.
Costed Cases
The number of cases that have been costed and reported. Excluded
cases and cases exceeding the trim point are not included in the number
of costed cases (see page 8). The total number of cases costed for each
Case Mix Group (CMG) may not equal the sum of cases costed for each
complexity level due to different trim point calculations for CMGs and Plx
groups (CMG code + Plx level).
Plx Level
Complexity levels (refer to page 9 for a more detailed discussion)
Standard Deviation
Measures the variability or distribution of the cost data (based on the set
of cost records). It is calculated from the deviations (differences)
between each data value and the mean. The more disperse the data is,
the larger the standard deviation.
Trim Point
The length of stay (LOS) value used to exclude some cost records from
the calculations, as they are considered to be atypical.
Information and Analysis Branch, Alberta Health and Wellness
© 2009 Government of Alberta
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Alberta Case Cost Report For 2006/2007 Hospital Activity
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